How High Can Groupon Inc (GRPN) Shares Go Following a Solid Earnings Beat?


It appears as if Groupon’s (NASDAQ:GRPN) restructuring plan is paying dividends as the company reported solid fourth quarter earnings after the bell yesterday. While analysts expected the company to breakeven for the quarter, Groupon Inc (NASDAQ:GRPN) reported adjusted earnings per shares of $0.04. They also beat expectations on the revenue front, reporting $336.2 million vs $331.8 million for the quarter. Consensus estimates for 2016 also came in at about what investors were expecting, as the company said they will likely earn between $2.75 to $3.05 billion in revenue on the year.

Shares of Groupon Inc (NASDAQ:GRPN) have shot up over 21% in the pre-market this morning, and investors now are asking if this is perhaps the turnaround that the market was looking for. Approximately a year ago the stock traded north of $8 a share, meaning that a few good quarters could really be a boon for shareholders.

The stock decreased 0.44% or $0.01 during the last trading session, hitting $2.24. Approximately 10,000 shares traded hands. GRPN shares have declined 54.29% since July 9, 2015 and are currently downtrending. It has underperformed the S&P500 by 45.42%.

From a total of 11 analysts covering Groupon Inc (NASDAQ:GRPN) stock, 3 rate it a “Buy”, 1 a “Sell”, and 7 a “Hold”. This means that 27% of the ratings are positive. The highest target price is $8 while the lowest target price is $2.25. The mean of all analyst targets is $4.07 which is 81.70% above today’s ($2.24) stock price. Groupon Inc was the topic of 24 analyst reports since August 5, 2015 according to the firm StockzIntelligence Inc. UBS maintained shares on November 4 with a “Neutral” rating. Brean Capital maintained shares with a”Buy” rating and a $5 target share price in their report from a November 4. Bank of America downgraded GRPN stock in a recent report from November 4 to a “Underperform” rating. Finally, RBC Capital Markets maintained the stock with a “Sector Perform” rating in a report they issued on a November 4.

The institutional sentiment decreased to 0.68 in Q2 2015. It’s down 0.94, from 1.62 in 2015Q2. The ratio dropped, as 47 funds sold all their Groupon Inc shares they owned while 74 reduced their positions. 26 funds bought stakes while 56 increased their total positions. Institutions now own 347.40 million shares which is 15.45% less than the previous share count of 410.89 million in 2015Q2.

Nea Management Company Llc holds 9.49% of its total portfolio in Groupon Inc, equating to 44.17 million shares. Brightfield Capital Management Llc owns 625,000 shares representing 6.54% of their total US portfolio. Moreover, Simcoe Capital Management Llc has 2.88% of their total portfolio invested in the company, equating to 1.34 million shares. The Washington-based Lesa Sroufe & Co has a total of 2% of their portfolio invested in the stock. Parametrica Management Ltd, a Hong Kong-based fund reported 95,292 shares owned.

Groupon, Inc. operates online local commerce marketplaces world over that connect merchants to clients by offering goods and services at a discount. The company has a market cap of $1.39 billion. The Firm operates through three divisions: North America, which represents the United States and Canada; EMEA, which consists of Europe, the Middle East and Africa, and international activities . It currently has negative earnings. The Firm offers deals on goods and services in three categories: Local Deals (Local), Groupon Goods (Goods) and Groupon Getaways (Travel).